Diabetes mellitus (DM) leads to a 3-4 fold higher risk of experiencing ischemic stroke. In addition, DM stroke patients are more prone to develop more and earlier white matter (WM) high-intensity lesions than non DM stroke patients. Treatment of stroke with tissue plasminogen activator (rtPA) at 2-3 hours after stroke decreases lesion volume in non-DM rats. However, tPA does not reduce lesion volume nor improve functional outcome, but increases the incidence of brain hemorrhage and blood-brain barrier (BBB) leakage in the ischemic brain of DM rats. In addition, treatment of stroke with bone marrow stromal cells (BMSCs) improves functional outcome in wild-type (WT)-stroke rats but not in DM-stroke rats. Therefore, effective therapy of stroke in the non-DM population may not necessarily transfer to the DM population, prompting the need to develop therapeutic approaches specifically designed to reduce neurological deficits after stroke in the DM population. Human umbilical cord blood cells (HUCBCs) are less mature than bone marrow and can be successfully used even when there is only a half-match. We found that treatment of stroke with HUCBCs starting at 1 or 3 days after middle cerebral artery occlusion (MCAo) improves recovery of neurological function in DM rats. In a novel and clinically relevant approach, based on our robust preliminary data, we therefore, propose to use HUCBCs for the treatment of stroke in the type two DM (T2DM) rats. The following specific aims and associated hypotheses will develop HUCBC as a safe and novel neurorestorative therapy which improves neurological function and reduces WM dysfunction and vascular damage in T2DM rats subjected to MCAo. In Aim 1 will investigate the safety and therapeutic effect of treatment of stroke in T2DM rats with HUCBCs. In addition, we will test the therapeutic effect of combination of HUCBC with tPA in T2DM rats; we will identify any potential adverse effects of tPA on HUCBCs and determine whether HUCBC treatment attenuates tPA induced adverse effects in T2DM rats. In Aim 2, we will elucidate the neurorestorative effect of HUCBC on WM remodeling after stroke in T2DM rats. HUCBCs have great commercialization potential as therapeutic agents, since they are readily available and easy to isolate without serious ethical and technical problems. HUCBCs can be used for autologous transplantation or allogeneic transplantation, when and if needed. The potential therapeutic impact of HUCBC on recovery on neurological function after stroke in the diabetic brain and the corresponding remodeling of the ischemic brain in DM rats opens enormous possibilities. This proposal is highly clinically relevant and if successful, will significantly impact the treatment of diabetic and possibly all stroke patients.